Exam Question 3 of 50 Select the best answer. How are net receipts from an inter

Question

Exam Question 3 of 50 Select the best answer. How are net receipts from an interest in timber treated? O A. Net receipts are allocated 10% to income and 90% to principal. O B. Net receipts are allocated entirely to income if received under a contract to cut timber from land owned by the trust. Net receipts are allocated to income to the extent the amount of timber cut does not exceed O C. the rate of growth during a period there is a beneficiary with a mandatory income interest. O D. Net receipts must be accounted for by the trustee under the separate business accounting rule. Subinit Answert

Explanation / Answer

Solution:

Net receipts are allocated to income to the extent the amount of timber cut does not exceed the rate of growth during a period therre is a beneficiary with a mandatory income interest.

Hence option C is correct.

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